7.1 SR 07-16-2012 - Laserfiche WebLink

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REQUEST FOR ACTION To ITEM NUMBER Ma or and Ci Council 7.1 AGENDA SECTION MEETING DATE PREPARED BY Public Hearin ul 16, 2012 Tim Simon, Finance Director ITEM DESCRIPTION REVIEWED By Host Approval Request -Spectrum High School Project Cal Portner, Ci Administrator REVIEWED BY ACTION REQUESTED Adopt resolution giving host approval to the issuance of charter school lease revenue bonds under Minnesota statutes, sections 469.152 through 469.1651. Consider approval of payment in lieu of fees agreement. BACKGROUND/DISCUSSION At the June 11, 2012, City Council work session, the Council reviewed the request by Spectrum High School for a Host Approval Agreement. Spectrum High School currently leases a building at 17796 Industrial Circle NW in Elk River and operates a 6-12 grade charter school under a Conditional Use Permit. Under state statute, charter schools cannot own land or facilities, and must form a separate affiliate tax- exempt entity to own a school building. The school has formed a new tax-exempt entity and is seeking a partner to issue conduit bonds (not to exceed $11.4 million) on their behalf for acquisition and equipping of the current building, to purchase another parcel of land, to complete the build-out of the existing school, and to develop athletic facilities on the new parcel. Because the city has already approved tax-exempt financing for the public works facility and a refunding bond in 2012, we are not able to issue the amount of conduit bonds needed without exceeding our $10 million bank-qualified limit. Anoka County has given preliminary approval to issuance of conduit bonds on their behalf. Per state and federal law, the governmental entity with jurisdiction over the project site must hold a public hearing and give approval to the issuance of the bonds even if the bonds are issued by another issuer. The city, county, and state meet the host jurisdiction requirement. Holding a public hearing as a host assumes no risk to the city with regard to bonds or die bonduig process. The attached agreements have been reviewed by the city's bond attorney. FINANCIAL IMPACT The School has proposed a lump sum payment in lieu of a fee (PILOF) in the amount of $194,276 due within 10 days of receiving the property tax exemption from Sherburne County. The funds will be P~DWERED B~ N:\PubGc Bodies\City Council\Council RCA\Agenda Packet\U7-1G-2012\Hostappro~-alrequest071G.docx ~~ /~ ~, i~~